Russia Cites Surveillance Concerns in Apple, SAP Source Code Demands

Apple and SAP likely will snub Russia's source code demands, even though Microsoft has been sharing for years. "Global reach for its products is more important to Microsoft than to Apple or SAP," said TBR analyst Ezra Gottheil. "Both Apple and SAP have significant, but not critical, business in Russia. ... I believe both businesses can withstand loss of the Russian government as a customer."

By Richard Adhikari
07/31/14 3:20 PM PT

Russia reportedly wants Apple and SAP to turn over their source code in yet another instance of fallout resulting from leaks about NSA surveillance activities.

The suggestion came last week, Reuters reported, when Communications Minister Nikolai Nikiforov
met with executives of the two companies: Peter Nielsen, Apple's general manager in Russia; and Vyacheslav Orekhov, SAP's managing director in Russia.

The Russian government reportedly wants to ensure the right of consumers and corporate users to the privacy of personal data, while also protecting state security.

Its justification for the demand was that Microsoft has been sharing its source code with Russia for years.

Friendship Da, Source Code Nyet

As for Apple and SAP, "neither company will provide their source code," Ezra Gottheil, a principal analyst at
Technology Business Research, told TechNewsWorld. "The code is their valuable intellectual property."

That was an extension of a deal Microsoft and the Russian government entered in 2002, in which Microsoft agreed to share the source code for Windows XP, Windows 2000 and Windows Server 2000.

"Microsoft recognizes that national governments have unique security obligations to their citizens, to defend their IT infrastructure and economies," said Tim Rains, director of Microsoft Trustworthy Computing.

"The Government Security Program, created in late 2002, is Microsoft's source code security program for national governments and international organizations," he told TechNewsWorld.

The GSP "offers a structured way to work with Microsoft to build greater trust in the security and integrity of our core enterprise products," Rains said.

While the U.S. Commerce department is restricting sales for software to use in Russia's oil and gas industries, the Microsoft deal "dates back to an earlier, more open time politically and was focused on improved cybersecurity," Seidenberg's Hill told TechNewsWorld.

Money Is the Thing

"Global reach for its products is more important to Microsoft than to Apple or SAP," TBR's Gottheil remarked.

"Both Apple and SAP have significant, but not critical, business in Russia," he continued. "Preventing the purchase and utilization of their products in the country would raise difficulties internally in Russia, [but] I believe both businesses can withstand loss of the Russian government as a customer."

Apple and SAP did not respond to our requests to comment for this story.

Please, No Peeking!

"The relationship between Moscow and the West is very tense, and American companies -- especially high-profile, high market cap ones like Apple -- are going to get caught up in that," observed Seidenberg's Hill.

Russia has locked horns with the United States and the EU over its role in political unrest in the Ukraine, with the U.S. earlier this week imposing sanctions against three Russian banks, and the EU agreeing to broad economic sanctions.

Communications Minister Nikiforov reportedly denied that Russian ministers earlier this year replaced their iPads with Samsung tablets in response to Western sanctions imposed over Russia's takeover of the Crimean peninsula.

Rather, reports that U.S. intelligence services were planning to increase the volume of data they intercepted were cause for serious concern to governments, he said.

Fears about NSA surveillance
were refueled by a report released early this year by the U.S. Privacy and Civil Liberties Oversight Board. In essence, it approved of collection of information under Section 702 of the U.S. Foreign Intelligence Surveillance Act.

"Even our allies are concerned about the potential for surveillance, so the Russians are going to beat that drum as long and as loud as they can," remarked Seidenberg's Hill.

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on
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